@pc2010: NYT Metered Model Is Designed To Preserve Reach And Grow Ad Revs

The big story the past few months on the subject of paid content is the NYTCo’s announcement that it would pursue a metered model for its website. Our Staci D. Kramer put the basic question to top NYTCo (NYSE: NYT) execs during the first afternoon session at paidContent2010, which is being held in the publisher’s own house on 41st St.: what’s the goal of the metered plan coming next year? And what’s the danger of closing the site off to new readers and the attendant ad revenues:

— Janet Robinson, President & CEO: The metered solution is an elegant solution. We look at this as a way to continue to have a robust ad sales and paid audience. We said it will take everything we need to do in terms of getting the technology in place.

— Martin Nisenholtz, SVP, Digital Operations: Another big question being asked about the NYTimes.com’s planned meter is, “Who is going to build it?” That question didn’t get answered today. Nisenholtz: “We have relationships across the industry. We don’t talk about our vendor relationships. What people don’t understand about these business models is not to figure out the pay models, the challenge is to come up with a model that not only charges, but helps us to continue to grow advertising. Balancing the decision involves seeing who will continue to read it for free, and who will pay. Heavy uses will pay.” Clearly, the NYTCo has considered whether or not there are enough readers willing to pay. So what is the magic number? Again, Nisenholtz declined to offer specifics. “If there weren’t sufficient numbers, we wouldn’t be doing it.”

— Arthur Sulzberger, Jr. (image), Chairman & Publisher: The danger inherent in paywalls is that you won’t get new readers, as users tend to avoid anything that isn’t free. Sulzberger assuredly said that the point of the meter is not to choke off potential new users. “We are not trying to take ourselves out of the digital ecosystem. He added that the NYTCo doesn’t expect the money to roll in with the first year, but he didn’t say how long the company would wait before deciding whether the meter works.”

— Rebuilding the newsroom: Despite the recent 100 layoffs, Sulzberger talked about the need to have reporters in Afghanistan or to give a reporter six months to look into the Tea Party phenomenon, and to address — this next line drew applause — “the need to get Olympics’ scores up on the site six hours before NBC Universal (NYSE: GE) wants us to.”

— On Times Select: Sulzberger: It was not a failure. We simply felt we could make more money without walling off columnists and archives.

— Blogs and the paywall: Back to the concern about choking off traffic. Sulzberger: “For the readers who come to the NYTimes.com 60 percent of users come from the homepage. There are people who come to the NYTimes.com as a destination. There’s a broad group of people who come from the side doors. They’ll still be able to read for free. But at a certain point, they’ll hit a paywall and they’ll become subscribers. Sulzberger adds: You can’t base your business on a model that just tries to please 5- to 7 percent of your audience.”

— Rusbridger rule: Slate Group’s Jacob Weisberg asked about Guardian editor Alan Rusbridger’s argument against paywalls, which basically stresses that “open access equals reach equals influence.” (Disclosure: The Guardian is the parent company of paidContent and ContentNext). Again, Nisenholtz denied that advertising and paywalls were necessarily in conflict. “Besides, I don’t think the Guardian has come up with a business model that allows them to make money from the web. A Guardian exec then offered to refute that point, nothing that the company has seen ad revenue growth online.

— Mobile and tier: Nisenholtz: The NYTCo has said that its iPhone news app has been downloaded 3.2 million times. Once the meter kicks in, it will include mobile. There will be tiers applied to the meters. The meter obviously won’t touch Amazon’s Kindle subscription offering.